University of South Alabama Foundation

At the May 27, 2010, Board of Directors meeting, the Board approved an agreement in principle to buy the University’s 300-plus-acre Brookley Campus for $20 Million. The Foundation plans to enter into a five-year option to purchase with the University. Annual payments by the Foundation to the University of $4 Million in each of five years will provide immediate funding for the planned Pediatric Expansion at USA Children’s and Women’s Hospital. Proceeds received from any future sales of the Brookley property would become a part of the investments of the Foundation and would provide continuing benefit to the University in the future, with the Foundation being sensitive to the University’s continuing education programs and conference center needs. During the option period, the University would continue to operate and manage the Brookley campus.

The Foundation’s timber investment continued to outperform predicted pricing levels in sales, with timber sales and thinning contracts, from July 1, 2009, producing revenues of $3,646,868. The value of timberland at March 31, 2010 was $148.5 Million. Site preparation for planting in the fall of 2010 was reported to be under way, with more than 3600 acres to be prepared for planting.

The net assets of the Foundation at March 31, 2010 were $269,803,000, an increase of 8% from June 30, 2009. Investments in stocks increased 25% since June 30, 2009. Annualized management and general expenses were 0.64%, well below the national average of 1-1.5%.